Hong Kong’s property buyers piled into the market to snap up 70 per cent of 332 new flats on offer at three projects across the city, taking advantage of the breathing room offered by banks this week when they deferred raising their mortgage rates. In Hung Hom, 126 of the 182 flats at Henderson Land Development ’s Baker Circle Dover project found buyers at 5pm, with about 12 bids chasing every available flat, according to sales agents. Over at Sham Shui Po, Ascend Speed sold two of the first batches of 32 flats at its J Loft project. In Pak Shek Kok of Tai Po district in northeastern Hong Kong, Sun Hung Kai Properties (SHKP) continued its success with its Silicon Hill project, selling 107 of 118 flats on offer during its third round of sales, following two consecutive sell-out weekends. Buyers were rushing in to get ahead of Hong Kong’s cycle of rising interest rates, as the city’s de facto central bank raised its base rate by 75 basis points on Thursday in lockstep with the US Federal Reserve . HSBC , Standard Chartered, Bank of China (Hong Kong) and Hang Seng Bank opted to keep their prime rates unchanged on the same day, effectively giving mortgage borrowers breathing room until the next interest rate increase. “The [effect] of higher interest rates on the market for new homes has been limited, as the sentiment is robust” among property buyers, said Midland Realty’s Hong Kong and Macau residential division chief executive Sammy Po. Baker Circle Dover is the first phase of Henderson’s 2,800-home Baker Circle project, one of the city’s largest urban redevelopment projects by a private developer. The average price during the first round of Dover’s launch was HK$23,888 per square foot, about 4 per cent lower than Mangrove which kicked off last September in the same neighbourhood. The tiny abodes, with sizes ranging from 202 square feet to 369 sq ft (34.3 square metres), received 2,160 registrations of interest. “Developers priced the new homes reasonably and the total amount is not very high, as most of these new homes are studio units and one-bedroom flats, which are most attractive for first-home buyers,” Po said. Silicon Hill in Tai Po comprises three phases and 1,871 homes. It received 2,100 bids for the 118 homes on the third round of sales, or 18 people vying for every unit on sale. The cheapest flat on offer in the current round was a 217-sq ft studio, priced at HK$3.8 million (US$484,000). However, market observers see that the downward pressure on the home prices in Hong Kong, the world’s most expensive to live, will increase as the mortgage, cost of purchasing a home, will gradually increase. “Rising interest rates have played a part in cooling what was a very hot property market back in 2021, with prices down from their historical peaks,” said Moody’s Analytics economist Heron Lim. Prospective homebuyers will be deterred from buying homes and “on the whole, rising interest rates will cool the market,” Lim said. The US central bank has flagged 10 increases through the end of 2023. The Hong Kong Monetary Authority increases its base rate in lockstep under its linked exchange rate system to preserve the local dollar’s peg to the US currency. “Those who are considering buying a home need to think clearly, [as] the market has actually started [to see] a cycle of interest rate hikes,” said Keith Chan, head of research in Hong Kong at Cushman and Wakefield.